REL bid to expand transmission business spiked

Updated: Aug 3 2005, 05:30am hrs

Anil Ambani-controlled Reliance Energy, which is already facing the ire of the Maharashtra government over its inability to handle power crisis in the aftermath of heavy rains in the state, has received another shock with the central power regulator denying it a transmission licence.

The Central Electricity Regulatory Commission (CERC) rejected the application of Reliance Energy Transmission Ltd (RETL), a group company, for construction of 20 transmission lines and 13 sub-stations in western region.

The Rs 4,700 crore project, which RETL wanted to execute on its own, is aimed at strengthening the western grid, which includes power-starved Maharashtra.

Reliance Energy would have become the first stand-alone private player in the transmission sector had it got the licence. The rejection, coming close to the notices issued to the company on Monday by Maharashtra revenue department and state power regulator MERC on outages in Mumbai, deals another blow to the companys ambitious plans to expand its business.

In its application, RETL had mentioned as experience, the transmission lines associated with its 500 mw Dahanu power plant in Maharashtra. However, RETLs plea was strongly opposed by state-run Power Grid Corp on the grounds that the private company did not have necessary qualifications to undertake such mega projects. PGCIL, the central transmission utility, also said it had already started work on the scheme.

In its order, CERC while rejecting RETLs plea also divided the scheme into four parts. PGCIL was awarded two parts (A and D) which involved construction of 765 kv and 400 kv lines by 2008-09. The other two parts (B and C) are to be given to private players on the basis of competitive bidding.